Accounting for

Non-Accountants
A MANUAL FOR MANAGERS AND STUDENTS

7TH EDITION

Graham Mott

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 To Valerie

First published in 1984 by Pan Books

Second edition 1990
Third edition published in 1990 by Kogan Page
Fourth edition 1993, reprinted with revisions 1994, 1995
Fifth edition 1999, reprinted 2003
Sixth edition 2005
Seventh edition 2008

Apart from any fair dealing for the purposes of research or private study, or
criticism or review, as permitted under the Copyright, Designs and Patents Act
1988, this publication may only be reproduced, stored or transmitted, in any
form or by any means, with the prior permission in writing of the publishers, or
in the case of reprographic reproduction in accordance with the terms and
licences issued by the CLA. Enquiries concerning reproduction outside these
terms should be sent to the publishers at the undermentioned address:

Kogan Page Limited

120 Pentonville Road
London N1 9JN
www.koganpage.com

Graham Mott, 1984, 1990, 1993, 1999, 2005, 2008

The right of Graham Mott to be identified as the author of this work has been
asserted by him in accordance with the Copyright, Designs and Patents Act
1988.

British Library Cataloguing in Publication Data

A CIP record for this book is available from the British Library.
ISBN 978 0 7494 5264 3

Typeset by Saxon Graphics Ltd, Derby

Printed and bound in India by Replika Press Pvt Ltd

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Contents

Preface vii

Part 1 The annual accounts 1

1 Financial reporting 3
2 Financial recording 18
3 The profit and loss account 29
4 The balance sheet 41
5 Cash flow statement 57
6 Accounting for different business organizations 65
7 Accounting for inflation 76
8 Value added 85
9 Financial ratios 92
10 Other performance measures 109

Part 2 Management accounting 117

11 Costing basics 119
12 Costing and pricing 135
13 Marginal costing 146
14 Standard costing 166
15 Budgetary control 178

Part 3 Financial management 195

16 The cost of capital 197
17 Capital investment appraisal 207
18 Managing working capital 230
19 Share values 247

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 Contents

20 Mergers, takeovers and buy-outs 264

21 Company taxation 274
22 Overseas transactions 284

Appendices
1 Financial reporting standards (FRS) as December 2004 295
2 List of abbreviations 300
3 Glossary of terms 302
4 Compound interest factors of 1 310
5 Present value factors of 1 312
6 Cumulative present value factors of 1 per annum 314
7 Answers to self-check questions 316
8 Further questions 331
9 Finance for business 341

Index 356

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